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Monday, September 1, 2008

Why doesn't GE make electric cars?

Hybrid cars are going mainstream. My former client, Toyota, has sold over one million Prius. Nearly every automaker is planning to launch some kind of hybrid.

GE should be in this market. (It’s name is General Electric, after all.) The company is a manufacturing giant (jet engines, locomotives). It is in the financing business (GE Credit.) Its growth strategy is linked to green-tech (eco-Imagination). And it is a household name with a reputation for dependability.

Why not make an electric car? One reason may be that GE lacks a sales and service channel.

The solution may be to use GM or Chrysler dealers. Both companies lag far behind in the development of hybrid vehicles. The GE name might create more buzz than if either GM or Chrysler launched its own hybrid car. And the dealer network would benefit from a new product that generates traffic into their stores.

In today’s automotive industry it is increasingly fuzzy who makes what. While private label branding is common in other businesses, it is only beginning to take root in the car business. Chrysler is considering sourcing mid-size cars from Nissan while also talking with Chery about selling the Chinese manufacturer’s cars in the U.S. under the Chrysler badge. GM and Toyota share a manufacturing plant in California that turns out the Toyota Corolla and the Pontiac Vibe. Different companies. Different brands. Same manufacturer.